MAYOR Bloomberg provided wonderful insight Wednesday – no doubt, unintentionally – as to why city taxes are so out of control.

And why they’ll never come down.

“The public constantly wants more services, and as the economy has been growing, the government has been able to provide those.”

Bloomberg was explaining how the city reached its current budget dilemma.

“The economy is a cyclical thing,” he continued, “and eventually what happened was: The economy slowed down, exacerbated by 9/11.”

“Expenses . . . continued on up. And we went from a world where we were generating a budget surplus every year to a world where the tax revenues . . . do not come close to paying for the services that the public wants and deserves . . . “

The gap, it turns out, is a whopping $5 billion – on a $43 billion spending plan.

But think about what Bloomberg said: In good times, people want – and “deserve” – more from the city. A good economy spews more tax revenue, so the city can afford new services.

In bad times, the city must cut back on spending, or find new cash, so expenses don’t exceed revenues.

OK. So when is it right to cut taxes?

Not in good times, when you spend extra cash on new services.

Not in bad times. Then, maybe, you trim spending. But you also look for new sources of revenue – like borrowing.

Or raising taxes.

Indeed, during bad times, tax hikes provide an easy out; most folks (in New York, at least) readily accept that the public must chip in more. (Which is why Bloomberg stuffed a few tax hikes into his budget, despite his campaign promises.)

Rare are those who argue seriously for a tax cut when city revenues dry up – as they have recently.

Such a suggestion will get you laughed right out of the discussion: If the city were to cut taxes, folks would say, revenue would fall even further. The $5 billion gap would grow, not shrink.

But if you think about Gotham’s current woes, tax cuts are not crazy at all. Not even today.

As Bloomberg said, New York suffers from an economy that slowed even before 9/11.

To close the budget gap, you’ve got to reignite the economy. Tax cuts would be a tremendous tool to help do that.

So it’s too bad that no one is suggesting tax cuts now. And that serious New York pols rarely ever do.

Because the tax burden in New York is onerous; indeed, it’s greater than in any other big city in the country.

Taxes need to drop.

Not just because of the pain they inflict.

But because, along with traffic, high costs, crime, red tape and a raft of other turnoffs, the tax rate plays a key role in driving – or sinking – the economy.

If you can’t cut taxes during bad times, and you won’t cut them in good times, that debilitating situation will never abate.

And New York will never reach its economic potential – good times or bad.